When you think of a water heater, chances are the first mental image that pops up is that of a traditional water heater with its unmistakable metal tank. While traditional water heaters remain a mainstay among many households, tankless water heaters have become a popular alternative.

Both types have their own unique benefits and drawbacks, which could make choosing between the two a bit confusing for the average consumer. You can use the following guide to figure out which water heater represents the best fit for your everyday needs.

What Tankless Water Heaters Have to Offer

There are plenty of advantages to purchasing a tankless water heater over a comparable traditional unit:

• Compact design - Since tankless water heaters do away with the traditional water tank, they're able to fit in more places than a traditional water heater.
• Instant hot water - There's no waiting with a tankless water heater. As soon as you turn your faucet, you'll receive a steady stream of hot water.
• No standby energy losses - Without an entire tank of hot water to maintain, most tankless units can do away with the issue of standby energy losses.
• Longer-lasting - Tankless water heaters offer a significantly longer lifespan than their traditional counterparts. A tankless unit can last up to 20 years, whereas a traditional unit offers only 10 to 13 years of reliable use.

There are a few caveats to consider, however. For starters, most tankless water heaters are more expensive to purchase and install than their traditional counterparts. Fortunately, it's possible to offset the purchase and installation costs through long-term energy savings. 

Although you'll have an unlimited supply of hot water, said supply will be split between all of the fixtures in your home if you're using a whole-house tankless water heater. This means you may not be able to use certain fixtures simultaneously without experiencing a loss of hot water. Fortunately, these issues can be alleviated with the installation of an additional tankless unit installed in tandem or multiple point-of-use tankless water heaters at each faucet.

What Traditional Water Heaters Offer

In spite of the many advantages that tankless water heaters offer, there are still plenty of good reasons to stick with a traditional water heater. If you're on a strict budget, for instance, the relatively affordable cost of a traditional water heater versus its tankless counterpart may sway you into buying the former. According to recent data gathered by CostHelper, homeowners paid an average of $948 for a typical 40-gallon unit.

The installation costs for a traditional water heater are typically lower than those for a tankless unit, depending on its capacity. The installation process itself is also likely to be more straightforward, since there usually aren't any special modifications needed. Traditional water heaters are also better equipped for handling simultaneous usage, although you'll have to worry about depleting the hot water tank in the process.

Not only do traditional water heaters have a shorter life expectancy than their tankless counterparts, but they're also more expensive and time-consuming to maintain. This often translates into higher maintenance and upkeep costs despite their lower purchase and installation costs.

Factors to Consider

Before making your final decision, you should consider how you typically use hot water in your home and base your decision on those usage patterns. For instance, point-of-use tankless water heaters are ideal for smaller households in need of on-demand hot water, whereas traditional water heaters excel at supplying large households that regularly engage in simultaneous faucet use (for instance, bathing while washing dishes or doing laundry).

Space is also another important consideration, especially if you need to increase your hot water capacity but only have so much space available for a traditional water heater upgrade. A compact, whole-house tankless water heater may be able to eliminate these space constraints while increasing hot water availability. Click here for more information on water heaters.